Asian shares mostly lower as cau­tion sets in

Arab Times - - FRONT PAGE -

NEW YORK, Sept 24, (AP): US stocks are swing­ing be­tween losses and gains in Thurs­day morn­ing trad­ing, as volatil­ity con­tin­ues to be the dom­i­nant force in Wall Street’s tu­mul­tuous Septem­ber.

The S&P 500 was 0.1% higher, as of 10:25 am Eastern time, af­ter ear­lier yo-yoing be­tween a loss of 0.8% and a gain of 0.6%. The Dow Jones In­dus­trial Av­er­age was up 2 points, or less than 0.1%, at 26,765, and the Nas­daq com­pos­ite was 0.2% higher. Both the Dow and Nas­daq also re­cov­ered from ear­lier losses, with the Nas­daq at one point down 1.1%.

The mar­ket’s mo­men­tum has shifted with light­ning speed re­cently, of­ten chang­ing di­rec­tion by the hour. On Wed­nes­day, the S&P 500 rose to a mod­est gain when trad­ing be­gan, only to end the day with a 2.4% slump. It’s down more than 9% from its record set on Sept. 2.

Thurs­day’s head­line re­port showed that 870,000 work­ers filed for un­em­ploy­ment claims last week. That’s slightly more than the prior week and a lit­tle higher than economists ex­pected. The numbers come as in­vestors are in­creas­ingly re­signed to Congress not de­liv­er­ing more sup­port for the econ­omy, as many had been ex­pect­ing, af­ter ex­tra un­em­ploy­ment ben­e­fits and other stim­u­lus ex­pired re­cently.

“In­ac­tion speaks louder than words,” Mor­gan Stanley strate­gists wrote in a re­port. They no longer ex­pect Congress to ap­prove a mean­ing­ful stim­u­lus pack­age be­fore the end of the year as part of its base case. But stocks re­cov­ered from their early losses af­ter a re­port showed that sales of new homes ac­cel­er­ated last month, con­trary to economists’ ex­pec­ta­tions for a slight slow­down. A turn­around for Big Tech stocks also helped to lift the mar­ket.

They’re the lat­est er­ratic moves for Wall Street, which has slumped sharply this month. Sev­eral rea­sons are be­hind the abrupt tum­ble, high­lighted by wor­ries that stocks sim­ply grew too ex­pen­sive fol­low­ing their record-set­ting run through the spring and sum­mer.

Among other con­cerns weigh­ing on mar­kets are the up­com­ing US elec­tions, par­tic­u­larly af­ter Pres­i­dent Don­ald Trump’s re­fusal Wed­nes­day to com­mit to a peace­ful tran­si­tion of power if he lost, and ris­ing ten­sions be­tween the United States and China.

Lay­ered on top of it all is the still­rag­ing coro­n­avirus pan­demic and the threat that wors­en­ing counts around the world could lead to more busi­ness re­stric­tions.

It’s a stark shift from late March into early this month, when the S&P 500 soared 60% and more than re­cov­ered all its ear­lier losses on wor­ries about the pan­demic-caused re­ces­sion. Still in in­vestors’ fa­vor is un­prece­dented sup­port from the Fed­eral Re­serve, which is hold­ing short-term in­ter­est rates at nearly zero and buy­ing all kinds of bonds to sup­port mar­kets.

But Fed Chair Jerome Pow­ell has said sev­eral times in tes­ti­mony on Capi­tol Hill this week that the cen­tral bank can’t prop up the econ­omy by it­self and that the re­cov­ery likely needs more help from Congress. He’s due to tes­tify again on Thurs­day.

Par­a­lyz­ing par­ti­san­ship has pre­vented a Con­gres­sional re­newal of aid, and the re­cent va­cancy on the Supreme Court caused by the death of Jus­tice Ruth Bader Gins­burg has deep­ened the di­vide.

Much of the mar­ket’s weak­ness this month has cen­tered on Big Tech, where crit­ics said prices ex­ploded too high even af­ter ac­count­ing for the com­pa­nies’ strong growth.

Ama­zon, Ap­ple and oth­ers have seen their rev­enue con­tinue to rise through the pan­demic, as work-from-home and other trends that ben­e­fit them take deeper hold. But Ama­zon shares were up more than 90% for the year just a few weeks ago, for ex­am­ple, and they tum­bled in re­cent weeks.

On Thurs­day, Ama­zon bounced back from an early morn­ing loss to perk 1.6% higher. Other Big Tech stocks also shook off losses to rise. Ap­ple was up 1.4%, Mi­crosoft was up 1.4% and Google’s par­ent com­pany was up 1.4%. Moves for such stocks have an out­sized ef­fect on broad in­dexes like the S&P 500 be­cause they’re the largest com­pa­nies in the mar­ket by value.

The yield on the 10-year Trea­sury dipped to 0.66% from 0.67% late Wed­nes­day.

In Europe, Ger­many’s DAX was close to flat, and France’s CAC 40 fell 0.3%. The FTSE 100 in Lon­don dropped 1%.

Asian shares were mostly lower Thurs­day as cau­tion set in af­ter a re­treat on Wall Street driven by a de­cline in tech­nol­ogy shares.

Mar­ket play­ers are feel­ing less op­ti­mistic about ac­tion from the US Fed­eral Re­serve and Congress to help the US econ­omy amid the dis­trac­tions of the pres­i­den­tial elec­tion and the bat­tle over the Supreme Court seat left va­cant by the death of Jus­tice Ruth Bader Gins­burg. Risks of a broader sell-off of tech­nol­ogy shares af­ter a long due correction, Hayaki Narita at Mizuho Bank in Sin­ga­pore said in a re­port.

Ja­pan’s bench­mark Nikkei 225 de­clined 1.1% to 23,081.70. Aus­tralia’s S&P/ASX 200 slipped 0.8% to 5,875.90. South Korea’s Kospi plunged 2.3% to 2,280.28. Hong Kong’s Hang Seng dropped 1.9% to 23,297.47, while the Shang­hai Com­pos­ite was down 1.5% at 3,231.51.


In this file photo, peo­ple wear­ing face masks walk past a bank’s elec­tronic board show­ing the Hong Kong share in­dex at Hong Kong Stock Ex­change. Asian shares were mostly lower Thurs­day.

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